The Bhutanese Leading the way.
Bhutan and European Union mark 40 years of partnership with renewed commitments on “Governance, Climate, and Investment”
The Royal Government of Bhutan (RGoB) and the European Union (EU) reinforced the strong partnership bond during the 13th Annual Consultations held in Thimphu on 22nd April 2025. This marks four decades of diplomatic ties.
This year’s consultations served as a vital platform to reflect on progress and chart new areas of cooperation. Discussions focused on democratic governance, sustainable development, climate action, and investment, reaffirming shared values and aspirations for inclusive growth.
In line with Bhutan’s 13th Five-Year Plan, the EU reiterated its continued support through the 2021-2027 MIP, which focuses on three key areas: climate change, green growth and self-reliant Bhutan; good governance for inclusive socio-economic development; and digital transition.
EU announced that from 2025 to 2027, its budget support will specifically target good governance and digitalization efforts.
EU expressed satisfaction with the progress of ongoing bilateral budget support programmes such as “Sustainable Agri-Food Systems” and “Strengthening Local Governance and Decentralization”.
In addition, it is exploring potential partnerships with the European Investment Bank (EIB) to support sustainable investments in Bhutan.
Looking ahead, the upcoming Investors Conference in Brussels and other European cities was identified as a key opportunity to further promote Bhutan as a viable investment destination. Cooperation in education, research, disaster preparedness, and risk reduction were also acknowledged as a growing area of engagement.
Both sides emphasized the importance of maintaining a rules-based international order and reaffirmed their joint commitment to the United Nations Charter.
Bhutan’s role as a founding member of the G-ZERO Forum initiative was particularly recognized by the EU.
A mutual pledge to strengthen the role of civil society organizations in Bhutan was made, acknowledging their role in delivering public services and enabling greater citizen participation in governance and policymaking.
The Bhutanese delegation to the 13th Annual Consultations was led by the Foreign Secretary, Pema Choden, and the EU delegation was led by the Deputy Managing Director for Asia and the Pacific at the European External Action Service, Paola Pampaloni.
Ambassador of the EU Delegation to Bhutan in New Delhi, Herve Delphin, and other officials from the EU, and also the officials from the Royal Bhutanese Embassy in Brussels attended the attended the consultation.
Further, during a meeting with the press, the Deputy Managing Director Pampaloni said that the EU views Gelephu Mindfulness City (GMC) as a key opportunity for investment, with plans to spotlight it at an upcoming business forum in Brussel at the end of this year. The forum aims to connect European investors with Bhutanese ventures while deepening understanding of Bhutan’s regulatory environment and investment climate.
EU delegates shared their continued support with Bhutan’s evolving trade, development goals and its graduation from LDC status.
In a landmark development, EIB launched its first operation in Bhutan—a €150 million loan dedicated to renewable energy, particularly solar and mini-hydro projects. The EU is also providing complementary grants and financial guarantees to reduce investment risks. This model has already supported innovative projects like Mountain Hazelnuts and is expected to pave the way for more green investments.
Agriculture and organic farming were highlighted as sectors with growing demand in European markets.
The EU reiterated its commitment to multilateral climate funds and Bhutan’s participation in global biodiversity financing mechanisms managed by the UNDP Bhutan. A new sustainable finance initiative is also underway, aiming to support biodiversity conservation and the development of green bonds and carbon credit frameworks.
As Bhutan and the EU prepare to celebrate 40 years of diplomatic relations, both sides shared their commitment to continue working hand-in-hand for a more sustainable, equitable, and prosperous future.
